Halliburton has reported a 26% drop in fourth-quarter earnings for 2012 after the company saw net income attributable to the company fall to $669 million in the quarter from $906 million same period last year. Total revenue in the fourth quarter of 2012 was $7.3 billion, up from $7.1 billion same period 2011.
“North America revenue was down 5% compared to the previous quarter, in line with the sequential 5% drop in the United States land rig count,” said Dave Lesar, chairman, president and chief executive officer. “Operating income was down 22% compared to adjusted third quarter results, driven mainly by an unusually high post-Thanksgiving decline in activity levels with key customers, increased consumption of our high priced supply of guar, and continued pricing pressure around hydraulic fracturing contracts,” he added.
North America margins were also impacted by the upfront roll out costs of Halliburton’s ‘Frac of the Future initiative; “by our commitment to our customers to remain active in the North America natural gas basins at lower margins, and by our decision to stack equipment during the fourth quarter,” explained Lesar.
Outside of the North American region, the company saw stronger results. The Middle East and Asia regions reported revenue and operating income increase by 14% and 46%, respectively. The growth was driven by higher year-end software, equipment, and completion tools sales, as well as increased service activity in Saudi Arabia and Australia.
The company’s ‘completion and production’ revenue in the fourth quarter of 2012 was $4.3 billion, with the Middle East and Asia region reporting that revenue raised to $542 million for the period, up from $371 million same period 2011.
The company’s operating income stood at $603 million, with the Middle East/Asia segment seeing a rise from $52 million in Q4 2011 to $124 million in Q4 2012. But the company also saw North American operating income fall from $940 million in Q4 2011 to $315 million in Q4 2012.
The total drilling and evaluation segment revenue in the fourth quarter of 2012 was $3.0 billion with operating income at $484 million. The Middle East/Asia region showed consistent year-on-year results, with the revenue rising to $698 million Q4 2012 from $621 million same period 2011.
Operating income for the region rose to $119 million for Q4 2012 from $118 million same period last year.
